Principle $(P) = Rs. 1000,$ Rate$(R) =10\%,$ Time$(T) = 2$ years and compounded annually.
Amount after $1^{st}$ year = $P + \text{Interest} = 1000 + (10\%\text{ of } 1000) = 1000 +100 = Rs.1100.$
Amount after $2^{nd}$ year = $P_{\text{after}\;1^{st}\text{ year}} + \text{Interest} = 1100 + (10\%\text{ of } 1100) = 1100 + 110 = Rs.1210.$
We can also get the final amount using the compound interest formula $P\left(1+\frac{r}{100})^n\right) = 1000 \times (1+0.1)^2 = Rs. 1210$
Now $P= Rs. 1210, R = 12\%, T= 5$ years for SI.
$SI = \left ( \frac{PRT}{100} \right ) = \left ( \frac{1210\times 12\times 5}{100} \right ) = 121\times 6 = 726.$
$Amount = P + SI = 1210 +726 = 1936.$
$\therefore$ Option D is the correct answer.